One of my colleagues once conducted an informal creativity session as part of a qualification he is studying for. And there was one mind-trick that I found particularly interesting. Its much easier to experience it, than it is to explain it. Take some time to actually do the exercise and don't read past what you are supposed to do. So here goes.For the first part of the exercise: For 2 minutes, think about as many ways you can use a paperclip. e.g. Ear-rings, hook...etc. See how many you can come up with.
Now, do not proceed until you have taken 2 minutes to do the first part.
For the second part of the exercise: For 2 minutes, think about as many was you can about what a paperclip cannot be used for.
What happened? If you were like me and many others, you would have found many other ways you could use the paperclip for! Interesting isn't it?
I'm going to apply this little negation technique to trading, and actually, its not really new to the trading world. Many of us look for reasons to trade, and many times our mind distorts our reality, and we "see" things that aren't really there. Sometimes, we end up fabricating what we want to see. And admitted so... that's also a challenge I face.
So if we apply the little negation technique, what happens? The negation technique can be used to eliminate some of these badly thought-through trades. Instead of looking for reasons to trade, look for reasons not to. If you can find 3-5 reasons not to trade, then perhaps its more prudent not to. If you can't find any reasons not to trade, then perhaps there you have a good opportunity.
Another way some people do it is to list the reasons to trade, and reasons not to trade. Then depending on which side has more reasons, decide if its a good opportunity to trade.
Of course, when it comes to trading, its a different environment from brainstorming. In trading, you have much less time to react. Weigh your options for too long, and you made find that the window of opportunity has already closed. Nonetheless, its sometimes a useful mental exercise to go through to keep ourselves in check.
What do you think?
